Tag Archives: Pension System

Transferring Your Membership

People make a lot of moves during their working lives. New towns, new jobs and, in some cases, new retirement systems.

Perhaps you were a teacher, but recently began working for New York State. Or maybe you had a job with New York City, but took a position with a municipality outside of the city. If you’ve recently joined NYSLRS and are still an active member of another public retirement system in New York State, you may be able to transfer that membership to NYSLRS.

Transferring to NYSLRS

To request a transfer to NYSLRS, contact the other system while you are still an active or vested member of that system. If you are still employed in a position covered by the other retirement system, or your membership in the other system has been terminated or withdrawn, you are not eligible to transfer.

When we receive your request to transfer from the other retirement system, we will compare your date of membership in NYSLRS with your date of membership in the other system. When the transfer is completed, your date of membership will be the earlier of the two dates. If applicable, your tier will also change.

Transferring from NYSLRS to Another Retirement System

To transfer from NYSLRS to another public pension system in New York State, you must complete and submit an Application for Transfer of Membership (RS5223).

Under certain circumstances, it may not be beneficial to transfer your membership to another retirement system. If you have any questions concerning your transfer, or if you are covered by a special plan, you should contact our Call Center toll-free at 1-866-805-0990 or 518-474-7736 in the Albany, New York area before completing the application.

Whether you are transferring in or out of NYSLRS, the transfer is effective upon receipt of your application and may be irrevocable.

You can find more information about transferring membership on our website.

The Economic Power of NYSLRS Retirees

Before they leave the workforce, NYSLRS retirees build careers based — at least in part — on serving the people of New York. They are police officers, firefighters and nurses. They are the countless civil servants working each day to keep government services functioning. Their contributions don’t end with retirement. In fact, NYSLRS retirees and their pensions contribute significantly to the communities where they live.

Seventy-eight percent of NYSLRS retirees and their beneficiaries (355,028 as of March 2017) stay right here in New York. They live throughout the state — from Long Island to the North Country, from the Capital District to Western New York and down to the Southern Tier. Altogether, they’re 1.8 percent of our state’s population, but in some areas, they account for more than 5 percent of the residents.

NYSRLS Retirees contribute a lot of money to New York State

Retirees’ contribute in New York State

This large population with steady sources of income has a significant and positive impact on our state and local economies. In 2016 alone, NYSLRS retirees were responsible for $11.8 billion in economic activity in New York State:

  • Property taxes. In 2016, retirees paid $1.7 billion in real property taxes. That’s 3.2 percent of the total collected for the entire state.
  • State and local sales taxes. NYSLRS retirees paid an estimated $618 million in state and local sales tax in 2016.
  • Job creators. Some retirees do go on to start small businesses as a second act. However, all NYSLRS retirees spend at least some of their income to the benefit of local businesses, and they are responsible for an estimated 72,370 jobs as a result.

Remember: 75 percent of the pension benefits that make all of this possible comes from the investment earnings of the Common Retirement Fund (CRF), not from taxpayers.

Retirees’ contribute nationwide

Are these statistics impressive? Yes. Surprising? They shouldn’t be. According to research from the National Institute on Retirement Security (NIRS), defined benefit pensions, like those provided by NYSLRS, are responsible for substantial economic gains throughout the U.S. — an incredible $1.2 trillion in total economic output nationwide.

Pensions give retirees a stable source of income, and, in return, retirees support our national and local economies with jobs, incomes, and tax revenue.

A Look Inside NYSLRS

Want an inside view of NYSLRS and the New York State Common Retirement Fund (Fund)? Curious about how the Fund is managed and how well its investments are performing? Then check out the latest Comprehensive Annual Financial Report (CAFR).

The 2017 CAFR, which covers the state fiscal year that ended on March 31, 2017, is chock full of facts and figures that offer a detailed look at the Retirement System and the Fund. The biggest story is the financial health of the Fund. The Fund’s assets were valued at $192.4 billion at the end of the fiscal year and continued to grow, reaching an estimated value of $201.3 billion as of September 30, 2017. The average return on Fund investments in fiscal year 2017 was 11.48 percent, well above the long-term expected rate of return of 7 percent.

The soundness of NYSLRS was confirmed by several recent independent studies, which concluded that the New York State’s pension system is one of the best-funded public pension systems in the nation. And that means NYSLRS’ 652,324 members and 452,455 retirees and beneficiaries can rest assured their pensions will be there for them in retirement.

A Look Inside NYSLRS

The average pension for an Employees’ Retirement System (ERS) retiree was $23,026; the average for a Police and Fire Retirement System was $49,123. In all, NYSLRS paid out $11.3 billion in benefits during the fiscal year. (Fund investment earnings covered 75 percent of the cost of these benefits.) But NYSLRS pension payments don’t just benefit the system’s retirees and beneficiaries. Because 78 percent of NYSLRS retirees and beneficiaries live in New York, $9.1 billion worth of benefits stayed in the State. And that money supported local businesses, paid local taxes and generated economic development statewide.

An Award-Winning Publication

NYSLRS received a Certificate of Achievement for Excellence in Financial Reporting for the 2016 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 13 years.

Retirement Fund Enjoys Strong Investment Returns

The New York State Common Retirement Fund (Fund) earned an estimated 11.42 percent on investments during the State fiscal year ending March 31, 2017, exceeding the long-term expected rate of return of 7 percent. The Fund ended the year with an estimated value of $192 billion.

Comptroller Thomas P. DiNapoli, Trustee of the Fund, credited the growth to a diversified investment strategy and strong returns on investments, particularly in the fourth quarter. Domestic and non-U.S. equities (stocks) performed particularly well, with an overall return of 17 percent. The return on real estate investments was nearly 11 percent. All returns are estimates, pending audited data that will be available later this year.

NYS Common Retirement Fund return on investments Fiscal Year 2017

The financial soundness of the New York State and Local Retirement System (NYSLRS) has been confirmed by two independent studies. A report by S&P Global Ratings ranked NYSLRS as the third best funded state pension system in the country for 2015. Only South Dakota and Wisconsin ranked higher. A study by the Pew Charitable Trusts also showed NYSLRS in the top three nationwide.

The Fund is the third-largest public pension fund in the country. NYSLRS provides retirement security to more than one million active state and local government employees, retirees and their beneficiaries. During the fiscal year that ended March 31, 2016, NYSLRS paid out $10.9 billion in retirement and death benefits. More than $8.6 billion was paid to residents of New York State, which generated local spending and provided economic support New York businesses and communities.

Investing in a Cleaner Future

Saturday is Earth Day. Since 1970, April 22 has been set aside as a day to draw attention to environmental issues. Today, 47 years after the first Earth Day, we face perhaps the greatest threat to the planet: climate change as a result of carbon emissions.

As trustee of the New York State Common Retirement Fund (CRF), Comptroller Thomas P. DiNapoli seeks sound and sustainable investments in strategies and companies that are developing and using low-carbon technologies.Comptroller DiNapoli's Sustainable Investment Strategy

The CRF’s investments in New York-based companies such as Crystal IS in Green Island and the High Sheldon wind farm in Sheldon are examples of low-carbon investment opportunities that provide solid returns for the Fund, create jobs and generate local tax revenues, while helping promote a lower carbon economy.

As an investor, DiNapoli continually seeks improvements in environmental practices and lower carbon emissions from the companies in the CRF’s portfolio. For example, he has asked Exxon­Mobil* and other portfolio companies to explain how they can adjust their business model to meet the worldwide effort to limit global warming, and has urged the Securities and Exchange Commission to ask fossil fuel companies to explain how they are addressing climate change. The CRF has created a $2 billion public equity index that excludes or reduces investments in the worst carbon emitting corporations, and increases CRF’s investments in companies that are lower emitters. In addition, DiNapoli has increased the CRF’s total commitment to sustainable investments to $5 billion to take advantage of the growing low carbon economy.

The Comptroller’s sustainable investment strategy is crucial to the long-term health of the CRF. Addressing investment risks presented by climate change is a major part of that strategy. Rising seas, severe storms, floods and droughts are likely to disrupt the global economy. Moving toward a low carbon future reduces risk to the CRF’s investments, spurs innovation and opens new investment opportunities.

*Update: Recently, ExxonMobil agreed to implement the CRF’s shareholder request, which received landslide support from more than 62 percent of Exxon voting shareholders.

“I am pleased Exxon has agreed to undertake this important analysis,” said DiNapoli. “Climate change is one of the greatest threats to our pension fund’s long-term value. Exxon’s decision demonstrates that investors have the power to hold corporations accountable and to compel them to address our very real climate-related concerns. We will continue to monitor Exxon’s response to climate change as we urge the company, and others in the energy sector, to find ways that they can adapt to the growing lower carbon economy.”

Links:

http://www.bbc.com/news/science-environment-39329304

http://time.com/4082328/climate-change-economic-impact/

 

Welcome New Members

Welcome to new members of the New York State and Local Retirement System (NYSLRS).

NYSLRS is here to help you plan for a financially secure retirement. Your retirement may be far in the future, but decisions you make now will have a big impact on your later years. Here are a few things you should know:

How Pensions Work

A NYSLRS pension is a defined benefit plan. Under this type of plan, once you are eligible for a pension and apply for retirement, you will receive a monthly payment for your lifetime. Your pension benefits are determined by a preset formula set by law. However, many employees in the United States, particularly in the private sector, are enrolled in 401(k)-style plans. The ultimate value of a 401(k) plan is based on the contributions made and investment returns. While 401(k) plans and other individual retirement accounts are a way to supplement your pension and Social Security payments, they do not provide the same level of security as defined benefit plans. Unlike your pension, these plans do not guarantee a lifetime benefit. Learn more about how pensions work.

New Members Checklist

Service Credit

Your NYSLRS pension will be based on factors such as your tier, retirement plan, age at retirement, final average salary, and service credit. One year of full-time employment with a participating employer is equal to a one year of service credit. Part-time employment is prorated. You may also be able to buy service credit for previous public employment or military service, which in most cases would increase your pension.

Start Saving Now

Because having a defined benefit pension plan is only one part of building a financially secure future, it’s essential that you save additional money for retirement. State workers and employees of participating local governments can take advantage of the New York State Deferred Compensation Plan. You can start by having as little as $10 deducted from each paycheck. You may choose how your money will be invested from a variety of options. Because of how compound interest works, the earlier you start saving, the better off you’ll be.

More Information

You’ll find more information in our booklet Membership in a Nutshell. We also publish booklets about specific retirement plans. If you know which system you’re in (Employees’ Retirement System or Police and Fire Retirement System) and your tier, you should be able to find your plan. If you are not sure what plan you’re in, ask your employer.

Overtime Limits for Tier 5 and 6 Members

The exact formula used in calculating your NYSLRS pension varies by tier and plan, but your credited service and final average salary (FAS) are the core variables. You earn service credit for paid service with participating employers and you also may claim it for some previous public service. FAS is the average wage you earned during the time period when your earnings were highest (36 consecutive months for Tier 5 and 60 consecutive months for Tier 6).

Your FAS can include overtime pay that you earned during the FAS period. However, for Tier 5 and 6 members, there are limits to how much overtime can be used to calculate your pension.

Members and employers aren’t required to make contributions on overtime pay above the limit, and your employer shouldn’t report overtime above the ceiling to us. While you can earn overtime beyond the limit, anything over will not count toward your FAS or your retirement benefit.

Tier 5 Overtime Limits

For Tier 5 Employees’ Retirement System (ERS) members, the limit changes each calendar year. The overtime ceiling for Tier 5 increases each calendar year by 3 percent. This year, the overtime ceiling for Tier 5 ERS members is $18,448.11. In 2018, it will be $19,001.55. For Police and Fire Retirement System (PFRS) members, the overtime limit is 15 percent of your regular earnings each calendar year.

Tier 5 & 6 Overtime Limits

Tier 6 Overtime Limits

For Tier 6 ERS members, the cap follows the fiscal year (April 1 through March 31), not the calendar year. For 2016-2017, the limit is $15,721. Come April that will increase to $16,048. The limit is adjusted for inflation based on the annual Consumer Price Index (CPI). The overtime ceiling for Tier 6 PFRS members is 15 percent of your regular earnings each calendar year.

Find more information about the overtime limit, FAS and retirement calculations in your plan booklet, available on our Publications page.

Stopping Pension Fraud

Stopping Pension Fraud is a top priority of Comptroller Thomas P. DiNapoliSince taking office, New York State Comptroller Thomas P. DiNapoli has battled public corruption. One of his top priorities is to protect the New York State and Local Retirement System (NYSLRS) from pension scammers.

Under the direction of Comptroller DiNapoli, NYSLRS has put in place a system of safeguards designed to prevent and identify potential incidents of pension fraud. One such safeguard uses data analytics to uncover and stop improper payments.

Post-Retirement Employment Violations

Our investigative efforts include a focus on post-retirement employment. New York State law restricts the amount of money public sector retirees can earn if they return to public service employment after retirement. The law permits public sector retirees under the age of 65 to earn up to $30,000 per year from public employment before their pension benefits are suspended.

As of this March, our review of post-retirement employment cases have uncovered more than $700,000 in benefit payments subject to recovery. For example, a former Newburgh City Fire Chief, who double-dipped by collecting $95,000 in pension payments while still working as fire chief, was federally convicted.

The “Muscle” in the Pension Fraud Fight

In some cases, the pension fraud NYSLRS uncovers gets referred to Comptroller DiNapoli’s wider umbrella program to root out public corruption and fraud involving public funds. The Comptroller’s aggressive initiative included partnering with federal, state and local prosecutors and law enforcement statewide, including DiNapoli’s groundbreaking “Operation Integrity” task force with Attorney General Schneiderman. To date, Comptroller DiNapoli’s various partnerships have garnered more than 130 arrests and $30 million in ordered recoveries.

NYSLRS’ partnership with DiNapoli’s “Operation Integrity” has resulted in the investigation, prosecution and recovery of stolen pension payments, exposing $2.75 million in pension fraud in recent years.

Here are some recent cases where pension scammers have been thwarted:

Comptroller DiNapoli and NYSLRS will not tolerate pension fraud. These arrests and convictions serve as warnings to those who might steal pension benefits: if you think you can steal the hard-earned benefits of NYSLRS members and retirees, you are gravely mistaken. When fraud is identified, Comptroller DiNapoli will work with law enforcement to hold the pension scammers accountable. The clear message to anyone who tries to defraud our pension system is that you will be found, and you will pay.

If you suspect someone of pension fraud, call the Comptroller’s toll-free Fraud Hotline at 1-888-672-4555, file a complaint online at investigations@osc.state.ny.us, or mail a complaint to: Office of the State Comptroller, Division of Investigations, 14th Floor, 110 State St., Albany, NY 12236.

A Quick Look at the NYS Common Retirement Fund

Comptroller Thomas P. DiNapoli is the trustee of the Common Retirement Fund, which is the third largest public pension fund in the country. The Fund’s assets come from three main sources: member contributions, employer contributions, and investment returns. The Fund has two main goals:

  • Provide the means to pay benefits to NYSLRS’ participants; and
  • Minimize employer contributions through an investment program designed to protect and enhance the long-term value of the assets.

Over the last 20 years, 79 percent of benefits have been funded from investment returns. When you retire from NYSLRS, your monthly pension benefit—and the benefits of many others—will be drawn from this fund. Ethical management and a long-term, diversified investment strategy has made NYSLRS one of the best managed and funded plans in the nation.
Common Retirement Fund Assets

Strategic Long-Term Investments

The Fund’s investment program is designed to weather the ups and downs of an increasingly volatile global market. Our long-term target allocation for our investment portfolio is 22 percent in fixed income assets (bonds and Treasury Inflation Protected Securities [TIPS]) and 78 percent in equities, which includes:

  • Domestic and international public equities
  • Real estate
  • Real assets
  • Absolute return strategies
  • Mortgages
  • Private equity investments
  • Opportunistic funds

A diversified investment strategy helps us meet the funding needs for our current and future retirees while also helping to control risk.

The Fund is Well-Managed

An independent review of the Fund commended Comptroller DiNapoli and NYSLRS for strong policies and ethical management. By adhering to the highest standards of accountability and transparency, our members, retirees, and beneficiaries can be confident the Fund is being managed wisely.

NYSLRS’ Special Retirement Plans

NYSLRSCertain PFRS and ERS members are under Special Retirement Plans manages more than 300 retirement plans for its members. You can group them into two main types: regular plans and special plans. Under a regular plan, you need to reach certain age and service requirements to receive a pension. For instance, if you’re a Tier 4 member in the Employees’ Retirement System (ERS), you’re eligible for a benefit when you’re 55 with five or more years of service credit. Most of our ERS members are in regular plans.

Special plans are a little different. Under a special plan, you can retire at any age if you have the full amount of service credit required. In NYSLRS, special plan members can receive a pension after completing 20 or 25 years of service. Special plans exist in both ERS and the Police and Fire Retirement System (PFRS).

Special Plans for Special Services to the State

As of March 31, 2015, there are 38,687 active ERS members and 30,754 active PFRS members in special plans. These members are part of the uniformed services. They fill titles such as:

  • Police officers
  • Firefighters
  • Correction officers
  • Sheriffs, undersheriffs, and deputy sheriffs
  • Security hospital treatment assistants

Public employees like ones listed above and in other similar titles face dangers and difficulties throughout their careers. They serve unique roles in the State, from fighting fires to patrolling our neighborhoods to assisting ill patients and more. We’d like to take this opportunity to thank this 13 percent of our active membership for the challenging, sometimes life-threatening work they do each day. You render special service to New York and its people, and we are grateful.

If you’d like to learn more about your retirement plan, please review your plan publication on our website.